As you know, I have a longer term equity short in AAPL at an 8+% profit with a little room to add to the position, I won't be closing this position no matter what happens, I also have two small spec positions in AAPL Calls, I'm almost considering adding to those, but I want to be very careful not to move those beyond spec. position size considering my big picture view of AAPL. As ALWAYS, if I make any changes to the model portfolios, I will let you know BEFORE.
Speaking of head fake moves today, AAPL is one to look at...
Since AAPL's downtrend that started after earnings, it has transitioned to a lateral trend. This morning support was tested and we saw what looks like a head fake move below support, suckering in shorts for what I have expected to be a nice short squeeze move in which the spec Calls should make money and I hopefully can fill out the last 15-20% of the AAPL equity short.
Here's a 5 min intraday look at today's move below support (as you know I view support/resistance as areas rather than exact levels), after that apparent shakeout move (bear trap) AAPL found some support at the old trendline.
The 1 min chart shows a positive divergence at the move below support and a leading positive since then.
The longer view of the 1 min chart's trend shows a positive divergence on the 8th near the lows and a recent leading positive divergence to the right that is leading as AAPL broke below the support trendline this a.m.
The 2 min chart shows the same original positive divergence in at the start of the lateral range and a leading positive divergence in to lower prices. This is no different than the way in which we want to short strength and buy weakness so long as we have an edge in doing so; it's just institutional positions are much larger than ours and ned time to be put together without tipping off the market and driving price against them.
The 3 min chart has even less noise, more trend and shows a sizable positive divergence as the lateral tend started, since AAPL has been leading positive with better divergences at lower price points.
Here's the 10 min chart (this timeframe is only on Telechart and doesn't have the same amount of history as StockFinder) showing a very nice positive divergence on the move below support today, it also shows a relative negative divergence near the top of AAPL's range. I suspect prices may have been moving a bit too high compared to the average accumulation area.
The 15 min chart gave us a good negative divergent signal at the April top to the left, as you may remember we saw a positive divergence in AAPL, Tech itself and a bunch of other tech names on the 23rd and 24th just before AAPL's earnings were released after hours on the 24th. We saw multiple signals showing a negative divergence or distribution in to AAPL's earnings gap higher on the 25th and AAPL trended lower, however as it has been trending lower, the 15 min chart has been positive through most of that move and has seen 3C make a higher low at today's intraday price low.
The close up view of the hourly chart has shown all the same, the April top negative divergence, the negative divergence on the earnings gap and a positive divergence building in to lower prices. However, this is not the big picture view of AAPL which is the reason I have the equity short.
This is the larger view of the 60 min chart which was confirming higher prices and went deeply negative in to AAPL's top, since then it has been leading negative severely (you can see the recent positive divergence from the chart above at the white arrow. This is the longer term view and why longer term I'm bearish on AAPL.
In addition, this 5-day chart shows a very parabolic move, you know I never trust these and see them as blow-off moves that usually fail just as spectacularly as they rise.
In addition, the daily chart shows confirmation of the move higher through most of 2012 with a leading negative divergence since AAPL's price highs. A leading negative divergence on a daily chart that forms this fast is rare and quite bearish.
So short term, I'm looking for an AAPL bounce (the stronger the better), longer term after that bounce (as I have suspected we have 1 more bounce that will be tech led), I'll be looking to fill out the rest of the equity model portfolio short in AAPL.
No comments:
Post a Comment